Wednesday, October 29, 2008

Time to cut

My brother-in-law was just notified that the job he has held for 10+years is being outsourced. He monitors computer systems to verify that ATMs across the country have enough money in them at all times. My dad, who trains sales people, is being asked to present the value of his job. Corporate executive retirements are not being replaced, their positions are being consolidated amongst current employees.

I think our recession is more a question of the chicken and the egg. Wall street continues to fall, and companies are getting ready for the coming storm by trimming excess, even the lavish AIG meeting was targeted at finding ways to cut costs. So which is it, will Obama get elected because the economy is going into recession, or is the economy going into recession because Obama is in the lead? Obama and the Democrats are standing up and saying they are about to tax people beyond the point where it hurts. Going to spread the wealth. Not everyone will get taxed of course, but when they levy taxes on big corporations, where does that money come from? Price increases on the products that you buy.

Business owners are fairly savvy when it comes to matters such as this. Many smart business owners and executives understand the need to cut will be there. They understand that Obama may be offering a $3000 tax break for hiring a new full time staff person. However, in most professions, it takes more than that to train someone just to be productive. But when businesses stop hiring, or start cutting staff, the good folks in Washington will call them greedy, after all they were being given a "huge" tax break. The result will be more people getting paid for their votes than getting paid for actually working. That's how "spreading the wealth" works. Once more than 50% of the voting public no longer pays taxes, you can raise taxes all you want. Of course that ignores the economic damage that will occur, but you are safe in Washington and passing money back to over half the people, while the media just marches to whatever drumbeat you play.

If you are in favor of taxing people making over $250,000 (or is it $200,000 after the debate?), ask yourself how you think your life will be better if these "rich" people pay more in taxes. What do you think you will gain? More money goes to Washington, do you think that will be funneled back to you? What if your boss is taxed more forcing layoffs then the money goes to help fund poverty relief in Africa (Obama's one attempted accomplishment in the Senate). You are out of a job, but a dictator in a third world country gets to add another security guard to his detail. Not to mention that many people making over $250K are very intelligent, driven people, if their jobs are cut will you find yourself competing for your job with these people who are likely more qualified and experienced and now willing to work for less?

1 comment:

  1. Businesses will first cut their support of sports teams and other important parts of their community. Donations to little league, art museums, school fundraisers, and other things will dry up very quickly because small businessmen will lack the money to help. This will happen before layoffs, but those will definitely come.